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Guild pushes GSEs to scale residual income analysis
Guild Mortgage is advocating for Fannie Mae and Freddie Mac to adopt residual income analysis at scale through ongoing conversations and data sharing.
Guild Mortgage is advocating for Fannie Mae and Freddie Mac to adopt residual income analysis at scale through ongoing conversations and data sharing.
The California-based lender has used this model since 2022 in its “While Fannie and Freddie have taken steps to incorporate rent and utility payment data and cash flow information into their underwriting systems, Battany characterized the moves as “baby steps.” The GSEs also recently removed the The limits of credit scores
Battany pointed to a Federal Reserve Bank of Kansas City study that found When analyzing risk, Guild studied roughly 3,000 loans originated between 2015 and 2021. The lender found a strong correlation between the residual income ratio and Consequently, Guild’s program accounts for a “super small amount” of its overall business — less than 1%, or just a few dozen loans annually, Battany said. This friction is the core tension the lender is attempting to resolve by pushing the GSEs.
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Originally published by Flávia Furlan Nunes
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